Vermont Legislature SmartTranscripts:

[Robin Scheu (Chair)]: Morning, this is the House Appropriations Committee. It is still Thursday, 01/22/2026. It is 11:35 a. M. And we had a little break and now we have spreadsheets to look at. So James is with us and will walk us through all the pieces of paper that we have. Where would you like to start? You tell us where you're

[James (Joint Fiscal Office analyst)]: So we're going to start with the same spreadsheet that we were looking at yesterday,

[Thomas Stevens (Member)]: so

[James (Joint Fiscal Office analyst)]: basically your 2026 budget adjustment overview. That's the big one on your trade outs.

[Robin Scheu (Chair)]: And I would like to thank you, Natalie, for making the gray lighter.

[Unidentified member]: Yes, thank you.

[James (Joint Fiscal Office analyst)]: Because that's a good graphic design element to keep in mind.

[Thomas Stevens (Member)]: You need the copy has to be hot.

[James (Joint Fiscal Office analyst)]: Let's see, the items we discussed was out yesterday have been checked and grayed out. And for making progress today, my suggestion to you, madam chair, was going to be that we discuss the non general fund items in the spreadsheet, primarily consists of global commitment and the special fund transfers and direct apps.

[Robin Scheu (Chair)]: Okay, so do we need to talk about anything on the first page? Or is that all the stuff on the

[James (Joint Fiscal Office analyst)]: So the first page, we have three zero one that's located in.

[Robin Scheu (Chair)]: Right, that's the last one, but the ones at the bottom are related to page load. Oh yes, we're still discussing those with the human services letter. We're gonna

[James (Joint Fiscal Office analyst)]: So that's 3 21, three twenty three, three twenty five.

[Robin Scheu (Chair)]: Right, so lines 55 to 58 at the bottom that we haven't done, because we're looking at the Hoff thing.

[James (Joint Fiscal Office analyst)]: And also line

[Thomas Stevens (Member)]: 68, the off the well path.

[Robin Scheu (Chair)]: And the shelter investment. The shelter investments is part of the HOP thing, so that's a discussion that we're going to have and but Dale Grant that was Dave's that Dave's Yeah, but the swap is between general fund and federal funds. That was E330, Dale grants, 130,000.

[Thomas Stevens (Member)]: Federal fund, right, so

[James (Joint Fiscal Office analyst)]: we have

[Robin Scheu (Chair)]: It's line 61. But net neutral to them is not net neutral to us, right? Because it's coming out of, they're reducing federal funds and increasing general fund. It's not net neutral to the general fund.

[Thomas Stevens (Member)]: So it's equal amount from general fund against federal fund? Is that

[Robin Scheu (Chair)]: Was it back filling

[Thomas Stevens (Member)]: general federal funds?

[Robin Scheu (Chair)]: It's a revenue back filling federal funds were reduced by $130,000 and they used general fund to fill. They said it's a revenue reconciliation related to grants. I think Dave, were you going to look at that one? Don't remember it. I don't remember that. Is there any idea what it's for? What was that? Advocacy and Independent Living grants. There's a couple of things. There's a collective bargaining agreement. We're not worried about that. That is what it is. But there's this 130,000 federal fund reduction and increase in general fund, and it just says federal revenue reconciliation. Call Bill Kelly. He's the business manager. Right, right, right. If you want to just check with that, that would be great. The WellPath invoices, are you still working on that with

[Thomas Stevens (Member)]: No, I've gotten some updated information that confirms what we talked about, that they bumped that one invoice. They went? Bumped the invoice from '25 to '26.

[Robin Scheu (Chair)]: Without having any money in '25.

[Thomas Stevens (Member)]: Their budget was $137,000,000 and the spend was almost $141,000,000 So what they did is they got moved, and then they used the delta between us to deal with payroll. What they did.

[Robin Scheu (Chair)]: Right, it's not the way we want them to spend their money, but here we are.

[James (Joint Fiscal Office analyst)]: That brings us down to the one time appropriation cadence. Right, and Adam is going to

[Robin Scheu (Chair)]: come in and talk about, you'll see some things in purple now, we're adding colors, this is the new adjustment from the administration after the downgrade of 8,100,000.0. So we'll have Adam explain them to us, but it's about something with accountability courts this year, and something with the agency of education this year, that's all new, and then Rattleboro Retreat Reconciliation, which is a good thing, that went from that's saving us $2,800,000 or something like that, or $2.66

[Amy (committee staff)]: $2.66

[Robin Scheu (Chair)]: It's also on the purple shade. So, of those three, I think we want to accept the Bible over tree. But the others, we're going to have Addison and Chocolates about that is something else you've got. Oh, and then the other one is pension fund that we have to do we kind of have to do that one for 3,000,000 so I'd recommend you check that off the other purple one and that one the very bottom oh there down there like 84.1 Was there anything else on this spreadsheet? What about 76.1 line about the No, that's the one those are the two things I mentioned that are in purple that we're going to have add and explain to us. That and 79.1. And then there may be a couple of other things too. And, James, at the bottom on line 100, the 80.59 is just the updated revenue forecast, so it is what it is.

[James (Joint Fiscal Office analyst)]: It's slide 100. Yeah. Yeah. So this section

[Amy (committee staff)]: The downgrade.

[James (Joint Fiscal Office analyst)]: Yeah, this accounts for the updated forecast, the revenue downgrade, and then there were additional reversions recommended by the administration to help compensate for the revenue downgrade, which you all have in front of you as well. I don't know if you want to wait for Adam Gresham to come in and run through that with you all.

[Robin Scheu (Chair)]: I would like just to explain it. So that's this purple sheet. Kimmo put together a spreadsheet of it, but we want it here from The United States.

[Thomas Stevens (Member)]: Thank you. And

[James (Joint Fiscal Office analyst)]: just for your reference, the paper in front of you that summarizes those reversion changes that Admle Gresham will walk through, it's the one appearing on the screen. Yes. And

[Robin Scheu (Chair)]: so we'll talk about the detail of additional reversions of 4,700,000.0. We do have an updated reversion to carry forward shoes, think

[Amy (committee staff)]: Autumn has posted that updated one? Yes.

[Robin Scheu (Chair)]: Okay, would you take down the old one so we don't get confused?

[Thomas Stevens (Member)]: Change on the big sheet. On

[Robin Scheu (Chair)]: Yeah, I Okay,

[Thomas Stevens (Member)]: what's 84.1, I'm sorry?

[Robin Scheu (Chair)]: That's the pension issue, the $3,000,000 pension So we have agreed to that and the Brattleboro Retreat Reconciliation. Is that just

[Unidentified member]: an additional calculation of what

[Robin Scheu (Chair)]: we owe for Easter's? Yeah, was the federal grant thing where the administration was overly optimistic in how much income they would get from the feds, the $13,275,000 turned out it was really only going to be about $7,000,000 So we need to make a $3,000,000 payment by '26 to cover the pension funds that are normally related to teachers who are employed under federal contracts. Oh, woah, woah, woah, woah, remember that?

[Unidentified member]: Yeah, that.

[Robin Scheu (Chair)]: Yeah, federal funds. Right, so we need to do that and we need to do the Grattober retreat because it's reduction in general fund, so we like that. The other two we're going to hold on. And

[James (Joint Fiscal Office analyst)]: then also open our lines 88 and 89, their transfer changes to and from general fund.

[Robin Scheu (Chair)]: Yes. So

[James (Joint Fiscal Office analyst)]: We had discussed the criminal history records check fund yesterday, and there was some speculation about whether or not that Yes. Is there's an item for that in the f y twenty seven budget. In looking at the f y twenty seven budget materials, I don't see any govern gov rec items pertaining to this special fund. I know that you were interested, madam Chair, in a conversation about whether a special fund is the proper funding

[Robin Scheu (Chair)]: source Well, for the would be our April company.

[James (Joint Fiscal Office analyst)]: Right, for April company.

[Robin Scheu (Chair)]: So now, we may just leave it in deficit, and that would give us a million dollars to use for other things. We do leave special funds in deficit, that's not we do that.

[Unidentified member]: I know, but what are the implications of doing that? Nothing, I mean it

[Robin Scheu (Chair)]: just sits there with a law, letters. And they continue to increase

[Unidentified member]: the deficit as they do work next year if they're not getting any money in there.

[Robin Scheu (Chair)]: Well, they're probably adding some money with whatever the fees are that would be coming.

[Unidentified member]: Well, fees would be coming. Right. Yes. Yes.

[James (Joint Fiscal Office analyst)]: Would expect to see this again. I mean, the FY twenty seven got reckons already in front of you. But as conversations evolve in the FY twenty seven budget cycle, that deficit number will

[Robin Scheu (Chair)]: They don't add any extra money to that fund from general fund for FY27?

[James (Joint Fiscal Office analyst)]: I don't believe so.

[Unidentified member]: Okay. So that's an open question. Their assumption would be that you're going to cover it. So bring it up to zero. Right, but we don't always

[Robin Scheu (Chair)]: do that.

[Unidentified member]: Right, I understand. They did not put anything for '27.

[Robin Scheu (Chair)]: And they just probably for the next budget adjustment they do the same thing. It's quite possible. That's our biggest deficit will be even bigger. Right. The only thing that's dangerous since they don't

[Thomas Stevens (Member)]: have any authority, but they all pay the staff, they've spent more than they should, we have to pay for it. We

[Robin Scheu (Chair)]: can rid of the specialist fund and then it's going to be accountable. And then the other question was, are we going make the agency of transportation pay back the $67,761 to the pilot when they're in deficit? And I just don't think they should do that.

[Thomas Stevens (Member)]: So all the people who type the payment in lieu of taxes, Everybody pays that, like the agency with all the land they have, all the taxes on the

[Robin Scheu (Chair)]: land goes to each one

[Thomas Stevens (Member)]: of those towns. They're all getting that money. Other sources besides tax money for property?

[Unidentified member]: The local option tax is what funds to the payment in lieu of taxes, but obviously that only comes from some communities and yet the payment in lieu

[Robin Scheu (Chair)]: of taxes goes in place where there's a state bill. And so the pilot is the people who have the local options tax now pay, it used to be a seventy-thirty split, the state can be 30. It's now a 70 five-twenty five split, but the state's getting 75. So they get an increase, they get a decrease. There is 15,000,000 or more in this pilot fund. Can easily fund 100% all of So we couldn't before. When I first started on this committee, we were at 75% or something. Now because so many communities are doing it and because the money for local options taxes is coming in at a higher rate than before, we have a nice healthy fund.

[Unidentified member]: We also have not increased the amounts of those pilot funds. We haven't changed the formula that we use to pay those towns for this bill. It's based upon the insurance value and that doesn't get updated very often.

[Robin Scheu (Chair)]: Now they're getting their healthy input. But the money that was used from the pilot, they were actually used a million 15,000 or 1,150,000 or something like that. And if they had, and that was the that was approved by us in the budget last year and the projects came in over budget by a little bit and so that's why they're using excess receipts or using some more of the pilot fund. If they had budgeted the right the full amount if we hadn't had that problem they wouldn't even be coming to us. They would have used all of the pilot funds anyway.

[Thomas Stevens (Member)]: So just roughly, it's greater than what the annual need is for. Do you have any relative sense of what the annual need is versus what the

[Amy (committee staff)]: We do have that, it's in

[Robin Scheu (Chair)]: the budget every year, Amy, somewhere in the budget, right, is the pilots what we pay for pilots the obligation the obligation is I we have to go add it up it's a bunch of different ones

[Thomas Stevens (Member)]: so I'm just going to try to get a proportion of how much is in the pot how much is the annual demand what is the how much is

[Amy (committee staff)]: left over there?

[Robin Scheu (Chair)]: Right now we have we used to be underfunded we always keep a balance in the pile a little balance and we were only doing like 80% or 75% or something for a while but now the money is, we're flushed, we can pay 100% and there's still plenty of balance left. Which is why we changed the split between the town and

[Unidentified member]: the state last year, and we also, we took a million, I think, out of it, maybe more than that, to cover the differential, to go back to municipalities for flood losses. If you lost money, if you lost your grand list because of bunch of flooding, this

[Robin Scheu (Chair)]: So is a support for it's only been used for things related to municipalities and in fact the transportation things to help municipalities with their projects. So it's an appropriate use of

[Unidentified member]: the funds. Okay, I didn't know what

[Robin Scheu (Chair)]: it why it went to transit. Yeah, that was why. That's why, okay,

[Thomas Stevens (Member)]: so that's why, so sheds and

[Robin Scheu (Chair)]: There might be roads and bridges in their towns. If

[Amy (committee staff)]: They it got washed out.

[Robin Scheu (Chair)]: So I'm fine with it. I just think it seems silly when they're in deficit to make them pay it back, and we're talking about $67,000 of general fund.

[Amy (committee staff)]: Yeah, but the thing that I recall is that when it was the representative of the area who froze changing us from 30% of the state to 25%, that was because of the mitigation to give

[Robin Scheu (Chair)]: the community more money to

[Amy (committee staff)]: be able to go and deal with the flood. Very obviously got hit really hard

[Robin Scheu (Chair)]: and many many many many

[Amy (committee staff)]: towns have tried to get this through. I don't

[Robin Scheu (Chair)]: think they have to go through a charter change in the market. No.

[Amy (committee staff)]: It's much easier to initiate it and it clearly saves the state money in other ways that the community can go and pay for that. Right.

[Robin Scheu (Chair)]: And if they got a lot

[Amy (committee staff)]: more money from it, you know, I would

[Robin Scheu (Chair)]: just leave it. But the mitigation issue is a major pulling force. Of the use of the pilot, which is not the same as this, but this is municipal projects. So are people okay with just not doing that?

[Amy (committee staff)]: Leave it alone?

[Robin Scheu (Chair)]: Yeah, so we won't do a general fund transfer with the July, July. Alright, so that's, did you get that James, so we're not here then? That gives us $67,000 in general.

[Amy (committee staff)]: So,

[Robin Scheu (Chair)]: we're keeping the criminal record check open. So I think we're done with that spreadsheet for right now, James?

[James (Joint Fiscal Office analyst)]: I think so.

[Robin Scheu (Chair)]: Okay, what else do you want to show us?

[James (Joint Fiscal Office analyst)]: Think that might be it. What

[Robin Scheu (Chair)]: are these other ones? We have a blue one and a green one. These are reversions and transfers. So, I think

[Amy (committee staff)]: you might have to go to deeper down here, your ups

[Robin Scheu (Chair)]: and downs on the worksheet to talk about different it's sort of like a non that's the you're talking just about general fund and you need to do the global commitment? Right. We haven't done the global commitment part We were going to, some of the DCF stuff were bit like the other. And there is that cannabis control. Oh yeah, so that's what I'm trying to find, that that's non general So

[James (Joint Fiscal Office analyst)]: that would be a non general fund item. And so in front of you on your hardtop, you would look at

[Robin Scheu (Chair)]: This one would look

[James (Joint Fiscal Office analyst)]: Exactly. You're doing the thing, yeah. Summary of general fund transfers and direct application changes. And the cannabis regulation fund item appears in the orange table on the bottom half of the page, line three.

[Robin Scheu (Chair)]: So we agreed with money coming in from yeah, guess you can't do less. Okay, so cannabis, this is the more money coming in from cannabis the governor's saying yeah we agree agree to that Addison's old spreadsheet. I believe $2.40. This is under transfers. Is on the very back page of Adam's big spreadsheet.

[James (Joint Fiscal Office analyst)]: Right, yep. Page eight of Adam's workbook.

[Robin Scheu (Chair)]: Right, so it's the one that reduces the general fund by $2.82, six eighty nine, and increases the special fund, which slide says 0.3. So they're just reducing general fund. I think we liked that.

[James (Joint Fiscal Office analyst)]: Yeah, the story here is that for early control board's lab, the administration proposed restoring spending authority that had been reverted away from the board to allow them to lead the lab project. That changed the closeout balances for FY '25 and the cannabis regulation fund, which then in turn requires adjusting the seventy-thirty split that leads to the cannabis regulation fund's general fund and substance misuse prevention fund. And so that's what this adjustment is. I

[Robin Scheu (Chair)]: have it checked off, but we haven't checked it off on this particular slide.

[Thomas Stevens (Member)]: So is it money coming out of the cannabis fund or money going into the cannabis fund?

[Robin Scheu (Chair)]: More money. It's going into the, it's reducing general funding more into the special fund.

[Thomas Stevens (Member)]: So more money's being applied from the special fund.

[Robin Scheu (Chair)]: It's being used from the special fund, not general fund.

[Thomas Stevens (Member)]: And so you're saving $300,000 And

[Robin Scheu (Chair)]: then, yeah, the next one is DFR. I think this is part of the governor's revised budget adjustment. Took another $2,000,000 in DFR for income. So that's a transfer to the general fund of additional $2,000,000 that driving that right James?

[James (Joint Fiscal Office analyst)]: That's correct. Okay.

[Thomas Stevens (Member)]: Yes? So, looking at this, and line number six, the one time transfer, that the proposal to use

[Unidentified member]: to move that money to pay down

[Thomas Stevens (Member)]: property tax rates.

[Robin Scheu (Chair)]: One are you trying to do?

[Thomas Stevens (Member)]: Line number six.

[Robin Scheu (Chair)]: Oh, oh, you we aren't there. We're doing the direct acts at the moment. Hang on just a sec. We're doing the orange section. Okay. So the dfr is increasing money to the general fund by $2,000,000 so I think you're probably good with that

[Thomas Stevens (Member)]: So just in reading the sheet, just so to understand, the difference from Governor's recommend $96,000,000 Is that $96,700 or $96,000,000 The bottom line?

[Robin Scheu (Chair)]: That's $96,000,000

[James (Joint Fiscal Office analyst)]: In line eight.

[Thomas Stevens (Member)]: So we're reducing That's a reduction. That's extra money?

[James (Joint Fiscal Office analyst)]: Well, yes. So the updated recommended transfers and direct apps or excuse me, reversions, direct apps from the administration are doing is adjusting for the revenue downgrade, freeing up additional general fund through additional proposed reversions and transfers.

[Robin Scheu (Chair)]: So that 96.7%, ignore that because we haven't agreed. It's there because we haven't agreed with everything yet.

[Thomas Stevens (Member)]: I don't care about the number. I just want to know.

[Robin Scheu (Chair)]: Once that's there, we'll see a difference from the government. But that one's not right, because if we accept the net transfers, now suddenly that 66.9 is going to go away. The difference now, if you look at the as passed in the budget that we passed last year, and what the governor's recommending and is updated, so he's taking another 5,000,000, 4,900,000.0 from these other places to have money to spend in the budget adjustment. So if we agree with that, we have an additional $4,900,000 to spend, and he's got what he's to spend. I mean, some of it's covering the downgrade of $8,100,000 So, of this we looked at and signed off on other sheet, on Adam's original sheet, accepted. We agreed with the DFR, but he's added another 2,000,000 coming from DFR, so we like that. The unclaimed property is staying the same and we already checked that off and the sports wagering and control have not changed so we could check those off.

[Thomas Stevens (Member)]: Essentially they're

[Robin Scheu (Chair)]: all checked off now And so the next time this spreadsheet is updated, it's not going to say a minus 96.7 up there because we basically agreed with everything on that section. So the difference from the House and the governor recommendation will be zero.

[Unidentified member]: The new governor of the president. Yes, because we've taken the next section.

[Robin Scheu (Chair)]: Right, exactly. The other up above, Tom to your point that 77,000,000 was from last year, that's not in this year's that's not the new number so they're all checked off because those already were done and there's no change to those but they were part of the year's budget. So the only two that were factored the same two that we're going to talk about, the records check fund and the pilot special fund, and we just agreed that we would not do the pilot spending fund. Student check that off. So you can check that off and just cross it off. I'm ready to go, just in case I forget what I meant. So the only thing open on that is the criminal record check,

[Amy (committee staff)]: so we'll hang up both.

[James (Joint Fiscal Office analyst)]: So more discussion on the criminal records

[Robin Scheu (Chair)]: Yes, check that's part of the whole how are we going to spend the money? There aren't a lot of places that we can find little bits of money if we want to fund other things, so that's one of the possibilities. We haven't agreed to it yet, but we're looking at it. I think we do some of it now. Okay, so reversions is the Mike, if you have any questions, you're good so far. Okay.

[James (Joint Fiscal Office analyst)]: And there's also a reversions table in front of you. It's the large table in green. I don't think there's anything that needs to be closed out by the committee here. This is more of a, this is for your information in case it became relevant.

[Robin Scheu (Chair)]: It's a

[James (Joint Fiscal Office analyst)]: very close out conversation.

[Robin Scheu (Chair)]: Addison to the problem. Well, this would be good to just have people look at. So, these are so they've taken some more money from other places. That's what so the government reversion was what we got in the original BAA. And then the change must be what they've done in the updated BAA. Is that right?

[James (Joint Fiscal Office analyst)]: Always. Yep. So all the way in the bottom of line, 59.

[Robin Scheu (Chair)]: Second page.

[James (Joint Fiscal Office analyst)]: On the second page, yep. You can see additional reversions post downgrade. So that changed cell, 4.677, reflects the revised guidance.

[Robin Scheu (Chair)]: It's not on this page.

[James (Joint Fiscal Office analyst)]: Well,

[Robin Scheu (Chair)]: also, the math isn't working. I think the original government gov, the reversions, was twenty oneone hundred twenty four. Okay, so that's even the '31. The '21 is gold is in the original Gov bread. And you've carried that number to the change. I don't, that doesn't make sense.

[James (Joint Fiscal Office analyst)]: I'm checking that note to confirm what's the with Amy's. Absolutely.

[Robin Scheu (Chair)]: So, for example, I think on line item two, they reverted an additional million dollars, but I'm not sure if that's true.

[Unidentified member]: If you were going back originally, we had reversions of 21,416.

[Robin Scheu (Chair)]: Right, and that is the number that's at the bottom down here. So this was in the budget, the 10,000,000 was in the budget, the 31,000,000 is the new, but the difference is the 21,000,000 that they did the new reversions of. That was in the original BAA that they got.

[Unidentified member]: The original BAA, So the question is what's

[James (Joint Fiscal Office analyst)]: Madam Chair, I apologize. I think there was a mistake in what I had printed off in front So of you I would just direct your attention to the spreadsheet on the screen that I'm sharing. This is, I think, the key point to take off. This is under GovRec reversion, that 4,677,000,000.000 number is the additional reversion recommended post revenue downgrade. So that's an additional $4.67 The version is recommended to free up additional general budget for FY 2017.

[Robin Scheu (Chair)]: So for this same site thing, that's a million and 12 oh, that's what I was missing. So maybe we can get a copy of that I'm seeing a couple of little typos that we can test out and then we can print it out but that's where they are that so this is so do we even do we need this one? All right, so we'll get another one for this afternoon And okay, so just recycle that green one before you forget because you're going be asking me what it is and James what it is. Thank you, sir. And so, why don't we come back at 01:10?